We are 4 sessions from expiry and nothing carries more attention this coming week than how expiry would play a role in the stock market fluctuations this coming week.
With open interest scaling new heights every expiry, there is no denying the large interest the expiry week holds for traders trading on the NSE.
Let’s look at what the Nifty has done this month of August from the first trading day since July expiry.
The blue shaded region represents value area for this series.
As we can see that price is currently above value area, implying that buyers are strongly in control of this tape.
5467 represents developing value area high and 5433 the POC, both values which we have talked periodically for the past two months.
They will have a role to play in the future too. So remember them.
Based on the above chart, we are set to expire above 5467 levels.
We will look at this chart on Wednesday at the close.
Here’s the bank Nifty :
This index confirms the action in the Nifty. Same inference. Watch the VAH & the POC.
Looking at the same chart from a weekly perspective, we get an idea of how strong this index has been.
Value has been building steadily higher.
The conservative trader will never attempt shorts above value area high. If you do want to short take a small position when value high is broken and add when value low breaks convincingly.
If it doesn’t it best to reverse and go long and with the trend, as can be seen in the shaded regions.
To close let’s look at the Nifty weekly:
Certainly not as strong as the Bank Nifty, but that large value area in that last week tells us the the longer time frame player is getting active in the index and we may see a move ( much of it happened already) after a lot of sideways action.
Enjoy your week-end.